The CEO of Fiat S.p.a, Sergio Marchionne, said his company will walk away from a proposed partnership with Chrysler LLC unless the carmaker's unions accept considerable labor cost reductions by the end of the month.

Marchionne, speaking to the Canadian newspaper Globe and Mail on Wednesday, April 15, said, "Absolutely we are prepared to walk. We cannot commit to this organization (Chrysler) unless we see light at the end of the tunnel."

Marchione gave the conclusion of the partnership only a 50-50 chance of happening due to a lack of movement in labor negotiations including those with Canadian unions. "From what I can tell from a distance, the Canadian Auto Workers may have taken more rigid positions," he said. "The dialogue is out of sync. I think they need to see what state the industry is in. Canada and the U.S. are coming in as the lender of last resort."

In the same interview, Marchione said that Fiat does not intend to buy the Saturn brand from General Motors in the event that the Chrysler deal falls through. If the partnership does not materialize by April 30, the federal government has indicated Chrysler will then go into bankruptcy.

Both General Motors and Chrysler are currently operating with approximately $17.4 billion in federal loans. Their corporate restructuring plans were rejected by the federal government and the Obama administration has been clear that a planned bankruptcy for GM is likely as is the dissolution of Chrysler.